Snap acquires Placed to prove geofilters drive store visits

If Snapchat’s growth remains slow, it needs to maximize how much it can charge per ad by demonstrating they inspire purchases and physical store foot traffic. So today, Snap confirmed to TechCrunch that it’s acquired location-based analytics and ad measurement startup Placed for an undisclosed sum.

Placed will help Snap scale its measurement systems like Snap To Store so advertisers can chart how online Snapchat ads translate into offline return on investment. GeekWire broke the news earlier today.

The six-year-old had raised at least $13.4 million, including a $10 million Series B led by Two Sigma Ventures in 2014. It had measured more than $500 million in ad spend for hundreds of partner platforms like PayPal and Pandora. Boosting advertiser confidence in ROI could help Snap grow its revenue, which fell short of expectations in its first earnings call this month and sank its share price more than 20 percent.

How Placed measures ad campaign effectiveness

Snap says Placed will continue to run independently at its Seattle headquarters, plus its NYC and LA offices, with its CEO David Shim reporting to Snap chief strategy officer Imran Khan. Snap also will put in place strict privacy, data-sharing and security rules to guarantee a physical and digital separation between Snapchat and Placed data.

Shim writes, “Placed’s goal continues to be the adoption of a common yardstick that can measure the offline effectiveness of advertising across multiple platforms and publishers.”

To do this, Placed has built an audience of users that it can ask directly about their recent locations and store visits. It combines this with third-party data to be able to determine what percentage of a sample of an ad’s viewers actually were inspired to visit a brick-and-mortar business. It then can extrapolate to estimate the brand lift and return on investment for an ad campaign.

That meshes perfectly with Snapchat’s Snap To Store system. When a user visits a business like McDonald’s and applies their Snapchat-sponsored geofilter to a Story post or private message, Snap To Store measures whether any of their friends that viewed that geofiltered Snap subsequently visited any of that brand’s locations. Placed will give Snap a wider measurement audience and deeper data so it can more accurately assess the impact of these geofilter ads.

Snap is deftly using acquisitions like Placed and Flite to close the advertising gap between its tools and those offered by the duopoly of Google and Facebook. Squeezing out as much average revenue per user will be critical as it’s unlikely to achieve their audience scale, especially as Facebook relentlessly copies its products. If Snapchat can leverage creative and interactive ad units, its tastemaker teen audience and strong ad measurement, it might be able to develop a relatively big business relative to its user base.